How is the Dutch food supply chain coping during the corona crisis?
Supply chain – The COVID-19 pandemic has definitely had the impact of its effect on the world. health and Economic indicators have been compromised and all industries have been touched within one way or another. One of the industries in which it was clearly apparent would be the farming and food business.
Throughout 2019, the Dutch agriculture and food industry contributed 6.4 % to the gross domestic item (CBS, 2020). Based on the FoodService Instituut, the foodservice industry in the Netherlands dropped € 7.1 billion within 2020. The hospitality trade lost 41.5 % of its turnover as show by ProcurementNation, while at the identical time supermarkets increased their turnover with € 1.8 billion.
Disruptions in the food chain have major effects for the Dutch economy and food security as a lot of stakeholders are impacted. Though it was apparent to most individuals that there was a significant impact at the end of the chain (e.g., hoarding around grocery stores, restaurants closing) and at the beginning of this chain (e.g., harvested potatoes not searching for customers), there are numerous actors within the source chain for which the impact is less clear. It’s therefore imperative that you find out how well the food supply chain as a whole is actually equipped to cope with disruptions. Researchers from your Operations Research and Logistics Group at Wageningen Faculty and coming from Wageningen Economics Research, led by Professor Sander de Leeuw, analyzed the influences of the COVID 19 pandemic all over the food supply chain. They based the analysis of theirs on interviews with about 30 Dutch supply chain actors.
Need in retail up, contained food service down It’s evident and popular that need in the foodservice channels went down as a result of the closure of joints, amongst others. In a few cases, sales for vendors in the food service business therefore fell to about 20 % of the initial volume. Being a complication, demand in the retail channels went up and remained at a degree of aproximatelly 10-20 % higher than before the crisis started.
Products which had to come via abroad had the own problems of theirs. With the change in need coming from foodservice to retail, the need for packaging improved dramatically, More tin, cup or plastic material was required for wearing in buyer packaging. As more of this packaging material concluded up in consumers’ houses instead of in restaurants, the cardboard recycling process got disrupted also, causing shortages.
The shifts in demand have had a major effect on production activities. In a few instances, this even meant a complete stop of output (e.g. in the duck farming business, which emerged to a standstill due to demand fall-out on the foodservice sector). In other cases, a significant portion of the personnel contracted corona (e.g. in the various meats processing industry), leading to a closure of facilities.
Supply chain – Distribution activities were also affected. The start of the Corona crisis in China triggered the flow of sea canisters to slow down fairly soon in 2020. This resulted in restricted transport electrical capacity throughout the first weeks of the problems, and high costs for container transport as a result. Truck travel encountered various issues. At first, there were uncertainties regarding how transport would be handled at borders, which in the long run were not as strict as feared. The thing that was problematic in instances that are most , nonetheless, was the accessibility of motorists.
The response to COVID-19 – supply chain resilience The supply chain resilience evaluation held by Prof. de Leeuw as well as Colleagues, was used on the overview of this main things of supply chain resilience:
Using this particular framework for the evaluation of the interview, the findings show that not many businesses had been well prepared for the corona crisis and in fact mostly applied responsive methods. The most important source chain lessons were:
Figure one. 8 best practices for meals supply chain resilience
For starters, the need to develop the supply chain for flexibility and agility. This appears especially challenging for smaller companies: building resilience right into a supply chain takes time and attention in the organization, and smaller organizations oftentimes do not have the potential to do it.
Second, it was discovered that much more attention was necessary on spreading threat and also aiming for risk reduction within the supply chain. For the future, meaning far more attention has to be provided to the way organizations count on specific countries, customers, and suppliers.
Third, attention is required for explicit prioritization and smart rationing strategies in situations in which demand can’t be met. Explicit prioritization is necessary to keep on to meet market expectations but additionally to improve market shares where competitors miss options. This task is not new, but it’s in addition been underexposed in this specific problems and was frequently not part of preparatory activities.
Fourthly, the corona issues teaches us that the monetary effect of a crisis in addition is determined by the way cooperation in the chain is actually set up. It’s usually unclear how additional expenses (and benefits) are actually sent out in a chain, in case at all.
Lastly, relative to other purposeful departments, the businesses and supply chain works are in the driving accommodate during a crisis. Product development and marketing and advertising activities have to go hand deeply in hand with supply chain events. Whether the corona pandemic will structurally replace the classic discussions between generation and logistics on the one hand and marketing and advertising on the other hand, the long term will have to tell.
How’s the Dutch foods supply chain coping during the corona crisis?